Wine drinkers reach for the top shelf

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Wine exports hit a record, but price-cutting has continued as
companies sacrifice profit for volume.

Australian wine exports hit a record high last financial year -
661 million litres, up 14 per cent.

And in an encouraging sign for Australia's struggling wine
companies, the latest Australian Wine and Brandy Corporation
figures show that after two years of splurging on cheaper booze,
overseas drinkers are taking to higher-priced, and more profitable,
Australian wines again.

Australian wine companies shipped $2.75 billion of wine overseas
in June, up 8 per cent on the previous year's figure.

AWBC information and analysis manager Lawrie Stanford said: "The
really pleasing outcome for 2004-05 was the 18 per cent growth in
shipments in the $5 to $7.49 per litre price bracket. That's where
the good profits are... and that's where we'd like to see continued
growth."

But the big driver of growth in sales remained in the $2.50 to
$4.99 per litre price bracket.

Wines in that segment accounted for just over half of all wines
shipped in 2004-05.

The trend of overseas drinkers paying less over the counter for
Australian wine continued as the companies cut prices to push
volume. The dollar per litre average slipped 5 per cent to
$4.16.

The aggregate price for Australian wine exports has been falling
for four financial years.

Britain, Australia's largest overseas wine market, remained the
most lucrative. In 2004-05, shipments there rose 37 million litres
to 263 million litres, worth $967 million.

Exports to the US rose 15 million litres to 187 million litres
worth $897 million, but fierce competition meant price-cutting
continued as wine companies sacrificed profit for volume.